UK-EU, Future Relationship Negotiations Nearing Agreement... Increased Expectations for Deal Before Christmas

Johnson-von der Leyen Final Approval Pending
Four Years and Six Months After Brexit Decision... One Week Left in Transition Period

[Image source=Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] The United Kingdom and the European Union (EU) are reportedly close to reaching an agreement on future relations negotiations after a marathon discussion lasting 10 months following Brexit (the UK's withdrawal from the EU). With just one week left before the end of the transition period, UK Prime Minister Boris Johnson and EU Commission President Ursula von der Leyen have personally stepped in to resolve the deadlocked negotiations, raising expectations that both sides could reach an agreement before Christmas.

According to Bloomberg and other sources on the 23rd (local time), the UK and EU negotiation teams agreed on the broad framework of the future relations negotiations and are currently coordinating the terminology to be included in the agreement. Following this news, the UK Prime Minister's Office stated that a deal with the EU is now within sight. A UK government official confirmed that both sides are finalizing the negotiations but added, "It is necessary to check whether the devil is in the details."

The final agreement requires review and signatures from Prime Minister Johnson and President von der Leyen. Although there were initial expectations that the deal could be finalized as early as that night, foreign media observed that since the legal documents exceed 2,000 pages and both sides are still engaged in last-minute tug-of-war over key issues such as fisheries and a level playing field, some time is needed to finalize the details. However, since both sides share the intention to conclude everything before Christmas, it is expected that the announcement on whether the deal has been reached will be made on the 24th.

Thus, the future relations negotiations between the UK and the EU are approaching the final goal of reaching an agreement after 10 months of discussions since Brexit on January 31. This comes four and a half years after Brexit was confirmed by the June 2016 referendum. The UK and the EU have been negotiating future relations to establish a legal basis governing their trade and security relations, during which they have clashed over major issues. Recently, they have confronted each other over fisheries, a level playing field, and governance issues for dispute resolution. The day before, Michel Barnier, the EU's chief negotiator, revealed in a meeting with EU member state ambassadors that last-minute negotiations were underway regarding the reduction rate of EU fishing quotas in the English Channel.

The UK and the EU have clashed throughout the transition period, and the possibility of a 'No Deal' scenario, where the transition period ends without any agreement, has been continuously mentioned. However, fearing the significant damage such an outcome would cause both sides, Prime Minister Johnson and President von der Leyen have recently taken the lead. The two leaders are reported to have been making daily phone calls in an effort to find common ground.

If both sides announce the conclusion of the negotiations, the next step will be parliamentary ratification. Given the limited time left in the transition period, the European Parliament has already stated that ratification within the year is unlikely. Instead, it is expected that the agreement will be provisionally applied from January 1 next year, with ratification to follow later. EU member state ambassadors are expected to hold a meeting on the 24th to initiate the ratification process immediately after the UK and EU leaders announce the deal. They are reported to have already begun legal reviews of the negotiation contents. Foreign media also reported that the UK House of Commons is likely to hold a special session on the 30th of this month to ratify the agreement once it is reached.

As the likelihood of a deal increases, the market has responded positively. The British pound rose more than 1% against the dollar on the day, surpassing the $1.35 mark. The Wall Street Journal (WSJ) reported that as news of an imminent UK-EU deal emerged, concerns over tariffs eased, causing the yield on the US 10-year Treasury note to rise from 0.917% the previous day to 0.96% on the day.

This content was produced with the assistance of AI translation services.